Thursday, December 31, 2009

An investigation is underway into a plane crash in Papua New Guinea that has killed six people and left their Australian pilot in a serious condition in a Brisbane hospital.Four adults and two children died when the Cessna 185 came down while heading to a remote airstrip in the Sarawaget mountain ranges of the Morobe province yesterday.Sydney-born Richard Leahy, 68, who owns Kiunga Aviation, was the sole survivor.His son Nicholas Leahy says his father was airlifted to Brisbane for treatment."He's in a serious condition. He's in the Royal Brisbane Hospital in the trauma unit," he said."He's got burns to 46 per cent of his body, he's also got a fracture in his spine. Most of the burns to his body are third-degree burns and he's being operated on as we speak."It is believed the plane may have had engine trouble.Nicholas Leahy says his father is an experienced and well-respected pilot."Dad's been flying up here for 40 plus years," he said."You'd be hard-pressed to find another bush pilot in New Guinea that's got more experience than him, especially in the mountain range which is his local area. His nick-name is Captain Cautious."Morobe provincial police commander Peter Guinness, police and medical officers were flown to the accident site on Wednesday to retrieve the remains and wreckage, The Nationalnewspaper reported."The plane was completely shattered and we could not do much," he said.No immediate cause for the crash has been offered because conditions in the area were considered fine."We will wait for the Civil Aviation Authority to do their investigation," he said.Over the past few decades Mr Leahy, who lives at Lae, has been involved in the discovery of dozens of WWII wreck sites in PNG.He has worked closely with the US Army CILHI, recovering the remains of troops missing in action and returning them to the United States.It is the second plane crash in PNG this year after a plane came down in the Kokoda area in August, killing 13 people including nine Australians.

- Aussie pilot badly burnt in PNG crash- Passengers were all PNG citizens- Cause of plane crash not yet known

SIX people are dead and their Australian pilot is fighting for his life in hospital after their light plane crashed in Papua New Guinea.Australian pilot Richard Leahy, who runs Kiunga Aviation, was flying the plane yesterday when the engine caught fire above the mountainous terrain of Morobe Province, on PNG's northwest coast.Leahy, 68, survived the crash but is fighting for his life in a Brisbane hospital.The plane had departed from Nadzab and was flying to the Baindoang airstrip when it crashed.Nicholas Leahy, Richard's son, told AAP his father had reported "a loss of all pressure and total engine failure".Richard Leahy is being treated for severe burns."He's in the trauma ward of the Royal Brisbane Hospital," Nicholas said."He's got third degree burns to 47 per cent of his body and he's got a fracture in his spine."The passengers were all PNG citizens. There were four adults and two children.The deadly crash comes five months after the Airline PNG Twin Otter tragedy in the Kokoda on August 11 that claimed 13 lives, including nine Australians on their way to trek the Kokoda Track.Morobe provincial police commander Peter Guinness, police and medical officers were flown to the accident site yesterday to retrieve the remains and wreckage, The National newspaper reported."The plane was completely shattered and we could not do much."No immediate cause for the crash has been offered because conditions in the area were considered fine."We will wait for the Civil Aviation Authority to do their investigation," he said.

Police, villagers and rescuers looking on as Morobe provincial police commander Insp Peter Guiness (left) takes a closer look at the tail section of the plane which crashed at the Bengun hillside yesterday morning after retrieving bodies of those who died as well as airlifting the injured pilot to Lae for further medical treatment.

Six people were tragically killed when a Cessna 185 fixed wing aircraft, owned by Kiunga Aviation, crashed early yesterday in the rugged Saruwaged mountain ranges of Morobe province, Papua New Guinea, The National reports.All six passengers, including two children, died instantly on impact.Amazingly the pilot Richard Leahy, who owns the third level airline, survived but was in critical condiction.The plane departed Nadzab and was headed for Baidoang airstrip when it crashed.The charred bodies of those killed are now at the Angau Memorial Hospital morgue in Lae while Mr Leahy was evacuated to Australia for medical attention.The 63-year-old pilot was found by locals, screaming for help near the wreckage, shortly after the crash.The bodies of the passengers were retrieved by a search and rescue team led by Lae police and medical personnel.Information received from the ground pinpointed the Bengun hillside, located between Gumbun and Tanam villages as the crash site.The rugged location is about a three-hour walk from Boana, the Nawaeb district station, and is 17 nautical miles northeast of Nadzab airport.At this stage, there are no definite leads to the cause of the crash, but engine failure is highly suspected as the weather was fine and Mr Leahy has a wealth of flying experience in PNG.

The PNG government claims it will have a balanced budget next year. The opposition party has further highlighted many key areas the government has missed out, or given low priority to in its 2010 Money Plan.

Many sectors are also complaining our next years' budget is far from being a balanced budget. What is a balanced budget anyway? Assessing any government budget will always been a subjective assessment.

Every government will always claim they have a balanced budget. There is no such thing as a balanced budget as many critics will always pick holes in any budget. They will always find many needy areas that the government has missed out on when drawing up its budget plan.

In future, the government must substantially do more other than say it has a balanced budget. Many priority areas are underfunded from previous years. There are important fundamental areas a budget must always cover are missed for a whole range of reasons. Successive governments have done this, even the opposition now picking holes in next year’s budget.

In addition, I suggest our government must do some required readjustments in 2010. It must complement any good budget by ensuring to put in place some effective mechanisms to achieve good financial management and accountability.

For many years, I see one great barrier that has prevented successive PNG Governments from addressing the real world issues of job creation, urban migration, health care and education, and that is our country's weak; and fragile fiscal position. In 2010, the government can increase PNG's revenue stream through developing new business opportunities in industry and other targeted government investment.

In addition, the government must do more than increased revenues. It should first of all put PNG's 'Fiscal House' in order that will always require sound fiscal management of government's current expenses. Its fiscal policies should be aimed to keep a tight rein on government spending, and refocus new spending to key priority areas that will boost sustainable economic growth.

The government must also provide real financial management, real transparency and real accountability. A new approach must now be found to stabilize the government's fiscal position.

I suggest next year, our government should try some future strategies like keeping real program expenditures constant by limiting the annual growth in spending to the anticipated growth in inflation. Any new needs that arise must be reasonably accommodated within this budget constraint.

The government must also ensure value for money by eliminating ineffective and inefficient programs. To do this, it should set objectives for program spending and tracking results. Another financial strategy is stopping the practice of year-end spending to use up unspent budgetary allocations, and assign any unanticipated budget surplus to debt reduction. So by reviewing financing arrangements to service the country's debt, the government can also immediately review all financing arrangements in all departments to cut the country’s debt; and reduce interest cost.

For many years now, governments spend up to some eighty per cent of its budget towards salaries and employee benefits. In the next five to ten years it must use this period to rationalize the workforce by reducing the size of its public sector workforce through rationalization strategies like: natural attrition, retraining for redeploying into the private sector.

Another good future strategy is to conduct a review of all government vehicle fleet and determine how many are necessary for government operations and downsize accordingly. Thus, by doing a further cost benefit study; it will be able to accurately determine whether these vehicles should be purchased or leased. All travel expenditures for elected and non-elected officials must also be reviewed and reduced.

Is there a possible weakness in the Papua New Guinea Parliamentary accountability process? The Ombudsman has been tasked with investigating (among others), the current Speaker of the House. How can the Ombudsman report to either the PM or the Speaker on his findings and not raise doubts about the investigation's result being released and acted upon? How can the PM or Speaker act on his own case? Where is the separation of powers? (excerpts from the PNG Constitution in red)

22. Enforcement of the Constitution22.The provisions of this Constitution that recognize rights of individuals (including corporations and associations) as well as those that confer powers or impose duties on public authorities, shall not be left without effect because of the lack of supporting, machinery or procedural laws, but the lack shall, as far as practicable, be supplied by the National Court in the light of the National Goals and Directive Principles, and by way of analogy from other laws, general principles of justice and generally-accepted doctrine.

23. SANCTIONS.

(1) Where any provision of a Constitutional Law prohibits or restricts an act, or imposes a duty, then unless a Constitutional Law or an Act of the Parliament provides for the enforcement of that provision the National Court may-

(a) impose a sentence of imprisonment for a period not exceeding 10 years or a fine not exceeding K10 000.00; or(b) in the absence of any other equally effective remedy under the laws of Papua New Guinea, order the making of compensation by a person (including a governmental body) who is in default,

or both, for a breach of the prohibition, restriction or duty, and may make such further order in the circumstances as it thinks proper.

(2) Where a provision of a Constitutional Law prohibits or restricts an act or imposes a duty, the National Court may, if it thinks it proper to do so, make any order that it thinks proper for preventing or remedying a breach of the prohibition, restriction or duty, and Subsection (1) applies to a failure to comply with the order as if it were a breach of a provision of this Constitution.

(3) Where the National Court considers it proper to do so, it may include in an order under Subsection (2) an anticipatory order under Subsection (1).

27. RESPONSIBILITIES OF OFFICE.

(1) A person to whom this Division applies has a duty to conduct himself in such a way, both in his public or official life and his private life, and in his associations with other persons, as not-

(a) to place himself in a position in which he has or could have a conflict of interests or might be compromised when discharging his public or official duties; or(b) to demean his office or position; or(c) to allow his public or official integrity, or his personal integrity, to be called into question; or (d) to endanger or diminish respect for and confidence in the integrity of government in Papua New Guinea.

(2) In particular, a person to whom this Division applies shall not use his office for personal gain or enter into any transaction or engage in any enterprise or activity that might be expected to give rise to doubt in the public mind as to whether he is carrying out or has carried out the duty imposed by Subsection (1).

(3) It is the further duty of a person to whom this Division applies-

(a) to ensure, as far as is within his lawful power, that his spouse and children and any other persons for whom he is responsible (whether morally, legally or by usage), including nominees, trustees and agents, do not conduct themselves in a way that might be expected to give rise to doubt in the public mind as to his complying with his duties under this section; and (b) if necessary, to publicly disassociate himself from any activity or enterprise of any of his associates, or of a person referred to in paragraph (a), that might be expected to give rise to such a doubt.

(4) The Ombudsman Commission or other authority prescribed for the purpose under Section 28 (further provisions) may, subject to this Division and to any Organic Law made for the purposes of this Division, give directions, either generally or in a particular case, to ensure the attainment of the objects of this section.

(5) A person to whom this Division applies who-

(a) is convicted of an offence in respect of his office or position or in relation to the performance of his functions or duties; or(b) fails to comply with a direction under Subsection (4) or otherwise fails to carry out the obligations imposed by Subsections (1), (2) and (3),

is guilty of misconduct in office.

28. Further Provisions

(1) For the purposes of this Division, an Organic Law-

(a) may give to the Ombudsman Commission or some other authority any powers that are necessary or convenient for attaining the objects of this Division and of the Organic Law; and (b) shall make provision for the disclosure to the Ombudsman Commission or some other authority of the personal and business incomes and financial affairs of persons to whom this Division applies, and of their families and associates, and in particular of interests in contracts with governmental bodies and of directorships and similar offices held by them (including powers to nominate directors, trustees or agents, or similar officers); and (c) shall empower the Ombudsman Commission or some other authority to require a person to whom this Division applies to dispose of, or place under the control of the public trustee, any assets or income where this seems to be desirable for attaining the objects of this Division; and (d) may prescribe specific acts that constitute misconduct in office; and(e) may create offences (including offences by persons to whom this Division applies and offences by other persons); and(f) shall provide for the investigation by the Ombudsman Commission or some other authority of cases of alleged or suspected misconduct in office, and confer on the Commission or authority any powers that are necessary or convenient for that purpose; and (g) shall establish independent tribunals that-

(i) shall investigate and determine any cases of alleged or suspected misconduct in office referred to them in accordance with the Organic Law; and(ii) are required subject to Subsection (1A), to recommend to the appropriate authority that a person found guilty of misconduct in office be dismissed from office or position; and

(h) may make any other provision that is necessary or convenient for attaining the objects of this Division

(1A) An Organic Law may provide that where the independent tribunal referred to in Subsection (1)(g) finds that-

(a) there was no serious culpability on the part of a person found guilty of misconduct in office; and(b) public policy and the public good do not require dismissal,

it may recommend to the appropriate authority that some other penalty provided for by law be imposed.

(2) Where an independent tribunal referred to in Subsection (1)(g) makes a recommendation to the appropriate authority in accordance with that paragraph or with Subsection (1A), the appropriate authority shall act in accordance with the recommendation.

(3) For the purposes of Subsections (1)(g), (1A) and (2), "the appropriate authority"-

(a) in relation to-

(i) a person holding an office referred to in Section 26(1)(a), (b), (c) or (d) (application of Division 2); or (ii) a person holding an elective office that is declared under Section 26(3) to be an office to and in relation to which this Division applies,

means the Head of State; and

(b) in relation to a person holding any other office to which this Division applies-means the appropriate appointing authority.

(4) An Organic Law may provide for the suspension from office of a person to whom this Division applies pending the investigation of any case of alleged or suspected misconduct in office by him.

(5) Proceedings under Subsection (1)(g) are not judicial proceedings but are subject to the principles of natural justice, and-

(a) no such proceedings are a bar to any other proceedings provided for by law; and(b) no other proceedings provided for by law are a bar to proceedings under that paragraph.

29. PROSECUTION OF MISCONDUCT IN OFFICE.

(1) Where the Ombudsman Commission or other authority referred to in Section 28(1)(f) (further provisions) is satisfied that there is a prima facie case that a person has been guilty of misconduct in office, it shall refer the matter to the Public Prosecutor for prosecution before a tribunal established under Section 28(1)(g) (further provisions).

(2) If the Public Prosecutor fails to prosecute the matter within a reasonable period, the Commission may prosecute it in his stead.

3 0. OTHER AUTHORITY.

Where another authority is prescribed under Section 28 (further provisions) that authority-

(a) shall be composed of a person or persons who are declared under Section 221(1) (definitions) to be a constitutional office-holder; and(b) is not subject to direction or control by any person or authority.

3 1. DISQUALIFICATIONS ON DISMISSAL.

(1) A person who has been dismissed from office under this Division for misconduct in office is not eligible-

(a) to election to any elective public office; or (b) for appointment as Head of State or as a nominated member of the Parliament; or(c) for appointment to a provincial legislature or provincial executive (including the office of head of a provincial executive), or to a local-level government body, for a period of three years after the date of his dismissal.

(2) In the event of doubt as to whether an office or position is an office or position to which Subsection (1) (a), (b) or (c) applies, the decision of the Ombudsman Commission is final.

Under the principle of 'Separation of Powers', the Chief Justice can only hear cases that are put to his Office, not determine what those cases are. The Ombudsman could establish an 'independent tribunal' (28. g.i., ii. above), be set up under these exceptional circumstances, to resolve the apparent impasse and to provide a process that is clearly transparent to the people of PNG. For example: Why not have the Ombudsman hand his report about the PM, Deputy PM and the Speaker to a bipartisan Parliamentary Committee, possibly chaired by the Governor General? That would provide probity and maintain transparency and conform to Sec 29. (b) above. The Parliamentary Committee could then refer any matter arising from the Ombudsman's report to the National Court, thus maintaining a separation of powers in these exceptional circumstances. If the Public Prosecutor refuses to act, the Commission may act in his stead. (29. (2.) above). Is there a Constitutional lawyer available who might be able to throw some light on this situation?

I just realised that the decade has almost ended and there is still not really a name for it. You have the 80s and the 90s. What in the world do you call the years between 2000 – 2010? 00s sounds silly. Or I guess you could also call it the “double-Os,” still ridiculous.

I read that some people are calling it “the aughts” or the “aughties.” Ummm…nice try, but that sounds worse than 00s. Your attempt to be cutesy with it is actually more of a failure than anything else.

Me? I usually call it the 2000s. Simple, truthful, and people can understand what I years I am referring to. However, when you get to the year 2011 and beyond, and you are calling 2000 – 2010 the 2000s, then what do you call the rest of the years?

It is a debate that is not going to alter anyone’s life, but it’s still an interesting one to think about. What do you think we should call this decade?

"Quis custodiet ipsos! Custodes? (Who is to guard the guards themselves?) Juvenal (63 -130) I refer to the article below in The National on Tue 29Dec09If the PNG Public Service Commission is currently under investigation, then all those who have been identified by the Public Accounts Committee should be required to take paid leave until after their investigation is complete. How can the PNG public service have any faith in their Service's leadership if the rot apparently starts from the top? If there is prima facie evidence that the PS Commissioners may have breached the law, the recipients should not be allowed to continue to act in their role as Commissioners until the matter is resolved. No wonder that there are constant disputes over 'missing' millions of Kina. Where overpayments are detected there must be immediate action. There are only two possible alternatives:1. There has been an unintentional mistake by both those paying the out the public monies and those receiving the funds, or 2. There has been intentional theft.In the first instance, those who have received funds they were not entitled to must demonstrate they didn't know they were being overpaid. They must then pay these public monies back immediately. If necessary, recipients of overpayments must either negotiate with their employer (the PNG government) for pay the overpayment back by instalments on their salary within a very limited time or they go out and get a bank loan like everyone else has to. The longer they take to pay bank the overpayment, the more they should be charged compound interest on the overpaid funds. Recipients MUST not come to believe they actually own the overpaid money as these funds have virtually been an interest free loan (from the public taxpayers). These actions are essential otherwise it sets a benchmark that others could expect to follow. In the second instance, it is a matter for the police, public prosecutor and courts. While no one should be declared guilty until proven so in a court,there might be some possible leniency offered by the court if the recipients paid all overpaid money back immediately as an act of good faith. Any departure from the above alternatives will give an entirely wrong message to the rest of the PNG public service.

Paul Oates_________________________________________________

Tue, 29/12/2009 'PSC bosses overpaid by millions'Source:By BARNABAS ORERE PONDROSTHE Public Accounts Committee (PAC) has established that commissioners of the Public Service Commission (PSC) and several staff received significant "extra" payments of salary and entitlements running into "millions of kina" and there is sufficient evidence for investigations into the commission. Government insiders said the figures actually run into "millions of kina", and according to a PAC document ""there is prima facie evidence of possiblebreaches of law by Commissioners, officers and staff of the commission sufficient to warrant referral for further investigations". At this stage, no figures were disclosed because "there is evident confusion as to the true entitlements of Constitutional office holders".But according to the document, an executive summary of PAC findings, obtained by The National, the PSC "admits the fact of all of the payments, but challenges the amount of those over payments".Despite the challenge and confusion the PAC "finds that commissioners of the Public Service Commission accepted large overpayments with no query or demur". The PAC also found that there were significant failures of management, command control, accountability and record keeping within the PSC.The PAC considered this a reckless indifference and said commissioners "should be relieved of their positions" and the matters be urgently addressed by the Government.PAC investigations into the PSC stem from a report from the Auditor-General dating back to Dec 28, 2004, and several amended reports.Although the PAC criticised the quality of the Auditor-General's original report, it endorsed its findings and related amendments. On that, the PAC resolved that its findings be presented to Parliament as per the Public Finances (Management) Act and Permanent Committees Act.For a start, the PAC advocates for an urgent review into the receipts of salary and allowances of all commissioners and other Constitutional office holders.It also resolved that it would approve and direct the findings of the Auditor-General's office report to the Ombudsman, the Public Prosecutor, theSolicitor General, the Police and the Department of Personnel Management. Furthermore, that the salaries and remuneration commission urgently consider the content of the Auditor-General's report and clarify the trueentitlements of Constitutional office holders in order that overpayments and other abuses may be identified and stopped. The Government source said such issues of overpayment of salaries and entitlements are a protracted issue and a chronic problem in the publicservice that needs to addressed."And this is uncalled for, especially from the premiere public service body in Papua New Guinea," the source said, adding "for how long can we allow such abuse of funds to continue when the majority of people in rural areas, and taxpayers are deprived of essential services".PAC member Sam Basil, when commenting on these findings, stressed that the Government must provide relevant support to ensure recommendations presented are implemented and achieve results.

Tuesday, December 29, 2009

So much for all the media hype about the big deal we have to have to save our planet. The recent UN climate summit in Copenhagen failed to meet the world’s expectations. All the hard work by 192 countries to reach some sort of agreement in Denmark came to nothing. It’s back to the drawing board.

Papua New Guinea wasted a lot of time and money going to Copenhagen when nobody got to hear what we have to say. Now we wait for the same meeting next year in Mexico. Before Mexico, the media hype will start all over again by scientists and certain rich nations world leaders grandstanding to everyone about the ‘new big deal of all deals’ this time to again save our world. But isn’t that what they said last time? Do we believe them again this time? Well maybe; maybe not.

Next year, PNG leaders (yes, the same politicians) will again talk up a storm to convince its still illiterate 6 million people about how great our new REDD paper will be for the Mexico meet. In Mexico, we are going to tell the big polluters what we didn’t tell them in Denmark. But why didn’t we do it last time when we are supposed to have spent some K8 million, and for what? Are we going to spend another K8 million or is in dollars or pesos this time? But what’s in it for us (PNG)? Nothing, nada, zilch, ‘gauta lasi’.

Copenhagen failed us all. There wasn’t any so-called Treaty, Agreement or Accord. The next big thing may be the ‘Mexico Memorandum’. We hope Climate Change Mexico will come up with something more legally binding this time to commit the rich nations. These are the big climate polluters like the US, China and other industrialized countries who must all agree to cut their carbon emission levels, and accepted by all conference participants.

PNG must seriously analyze what Copenhagen’s failure really means and be better prepared for Mexico. In Copenhagen, everyone failed to agree what definite future action to take to save our world. The conference agreed to all procrastinate until next year. In Mexico, we will see more repeat performances in platitudes and pontification by rich nations, and acquiescence by poor nations. They seem to have little choice but heel to the arrogance of polluting countries.

This failed conference should tell PNG a lot about the world political order today. The global human race club has two types of membership. They form within two sub-clubs: the rich and poor men’s clubs. But in reality the fate of the world is exclusively in the hands of the rich man’s club (G20 group). They think they should always call the shots because they have the financial resources, high technology, well organized government and affluent society, etc. A member of the poor man’s club like PNG and other small poor nations, unfortunately have no real say at all (or do we?). Maybe one day.

Copenhagen did not have any true champions to push its set agenda. Even the US proved a major disappointment to everyone. President Obama gave a very ordinary address that did not excite anyone at all. Obama even got accused of not taking the expected leadership role to get big recalcitrant polluters like China to come to the fold. Some say his Copenhagen address has made him no different to his predecessor.

However, if there was ever any deal of some kind, then one can say it was between the US and China, India, South Africa, and Brazil which established a kind of a negotiating bloc. The four developing nations asked for and got the following: no compulsory limits on carbon emissions, no emissions reduction unless Western nations pay for them, no international monitoring of emission reductions if not paid for by the West and lastly, not to use global warming as an excuse to impose protectionist policy of trade restrictions on those who do not reduce carbon emissions.

What can PNG learn from this? First of all, be better prepared for Mexico. Second, cut travelling delegates down to six with no unnecessary brief-case carriers. Third, we start now by drafting a good bipartisan paper to present next year. Fourth, canvas all stake-holder’s viewpoints. Get community feedback from everyone (villager, rural, urban, the whole country) that may be affected in future by climate change. Last but not the least, we can right then plan out exactly what we can actually do now within our own means and resources. This is important before we even think about asking rich nations for a ‘hand-out’.

PNG must have its own national “Climate Change Action Plan’ now. Many things can be done by ourselves without waiting to go overseas and attend expensive ‘talk-fests’ at the behest of the rich men’s club. We only show that we are really helpless without the West propping us up every time.

Papua New Guinea needs to have a vibrant financial market to boost its steadily growing economy. In addition, we must also explore the offshore option. Having an offshore stabilization fund as recently mooted by the Treasury may not be a flawed logic as many people may think. There are certain benefits involved. However, it is important to be vigilant. We must be more aware of the offshore market conditions so we do not rush in without first assessing the market. The government must do its own due diligence. Its financial advisors must not simply believe everything they are told by the overseas financial institutions until they have done their own investigation. They must first investigate, analyze and confirm that the source (Banks, finance companies, etc) giving us the offshore option is also applying the same effective strategies themselves, and that the information given is truly genuine, and from reliable financial advice service sources. There has been a lot of talk in recent years about the benefits of placing funds (whether public, private or individual investors) in offshore funds (companies, trusts and investments). But let’s always be on guard that while some of this information may be correct, a lot of it can also be incorrect. A common perception prevails that it is expensive, and may not be viable (especially for the average person). So let us look at some reasons why an offshore funds investing can be an alternative investment choice for PNG. Firstly, if we structure the offshore company correctly (this is vitally important) we can gain substantial tax benefits. Second, we can access investments that we may not be able to invest here due to a narrow-base market. Third, an offshore bank or company also suffers none of the restrictions we may currently have. It can freely invest in these investments that can yield from 25 per cent to several 100 per cent a year. Presently there may be existing constraints in government regulations regarding foreign prospectuses to anyone here, but can be sent to foreign companies. What is more, people set up an offshore financial structure (company) to manage investment funds for asset protection, privacy and confidentiality. In as far as international tax planning goes; an offshore funds investment has the advantageous use of foreign jurisdictions and their tax rules for reduction of tax liability. There is also nothing wrong in keeping the money in our Central Bank, but there may be other inherent technical constraints that may take time to review. In general, offshore investing is also a good strategy to diversify our country’s investment range. So apart from investing in PNG, it can also be a safe and good investment practice for PNG to have its surplus money in good international funds management jurisdiction. Here our money is reinvested in several other high-yielding financial instruments to maximize upon good high investment rate of returns many International financial institutions and investment banks offer to its international clients. On the other hand, while it is not that difficult to set up a Foreign Investment Fund as some people have recently suggested with surplus proceeds from our LNG in PNG, diversifying in an offshore investment opportunity is good investment practice. This way, we are simply not putting all our eggs in the one investment basket. There are several prudent hedging strategies the government can use. Once done, we can then use creative financing to borrow offshore and loan to smaller PacificIsland countries earning revenue within an onshore financial market. The power of OPM (Other People’s Money) allows the required flexibility to diversify our financial market and hedge against risks of providing offshore loans to other Pacific states. Such an onshore facility allows us to relend at lower but competitive interests rates. OPM is a preferred option as it is not good investment strategy to use one’s own money, but the banks to leverage favourable interest rates. Another good way to have a vibrant and diversified financial market is to create a futures market base in PNG. We can now set up our own commodities futures and options exchange as opposed to the present passive local bourse (PomSox). Once set up, we then gradually and systematically build up a diversified range of investment opportunities onshore. The futures exchange can annually add a variety of new financial instruments for daily trading activity. A futures exchange allows public (institutional, banks/finance companies, private and individual small-time) investors to do investment trading onshore than overseas. We can create wealth within our country now by trading futures contracts on common commodities like coffee, cocoa, copra, oil palm, crude oil, sugar, orange juice, pork bellies, currencies, financial indexes, to mention just a few. The exchange can further dual list other commodities commonly traded on overseas futures (and options) exchanges. This will result in a greatly enhanced trading flexibility, increased volume, lower risk hedging factor and high leverage returns for investors; among others. The government must also consider lowering onshore banking interest rates to around 2.5 and 3 per cent so the majority of our people are fully involved in growing our economy. More onshore business opportunities can be realized by our people if the government is prepared now by being more innovative and create a vibrant financial market. The country is ready for other alternative investment choices for our people. This must now be PNG’s immediate wealth creation strategy within the next five years as part of our government’s national strategic wealth plan for Papua New Guineans. We can no longer wait and watch only foreigners acquire wealth at our expense.

Monday, December 28, 2009

We've just had some very welcome rain and although no run off yet, the grass has started to grow. There's a patch of grass just outside the backdoor that seems irresistible to the wobblies and kangaroosters. Mrs Wobbly is busy keeping an eye on her spouse while Mummy roo has a Joey that is about to outgrow her favourite refuge. The blue crested pigeons are hanging around for some stale biscuits.

PAPUA New Guinea has largely slipped off Australian radar screens, even though it is our nearest neighbour and was our responsibility as a former colony.

So you may be surprised to hear that it has bright prospects by developing world standards, which could see it rise rapidly through the ranks. But whether those prospects can be fulfilled, particularly in terms of benefits to the mass of the people, is another matter.

The nation of 6.3 million people is enjoying its longest run of economic growth since independence in 1975, seven years and counting. The government set a target many saw as fanciful: growing by 5 per cent a year after inflation by the end of this decade. This year, despite the international recession, it grew by 6.2 per cent and last month's budget forecast 8.5 per cent next year. But that is just warming up.

A few weeks ago, the PNG government signed a deal that promises to earn $35 billion in the next 30 years through the export of liquefied natural gas. The gas fields are to be developed in the Southern Highlands, with pipelines running 300km to the coast, then another 415km underwater to a processing plant outside Port Moresby, from where it will be exported.

The project, a partnership between ExxonMobil, Australian company Oil Search, the PNG government and others, involves an investment of $16bn; this in a country whose gross domestic product was $13.7bn last year and whose exports are less than $6bn a year. Visitors say signs of the new affluence already are apparent in Port Moresby, with new hotels and expensive housing springing up.

Yet there is a sense of foreboding among many experts on PNG. What are the chance of the benefits from all this development flowing through to the mass of the population?

"Right now, I would say very little," says Jenny Hayward-Jones, a former Australian Department of Foreign Affairs officer who runs the Melanesia program at the Lowy Institute. But, she adds, there is time between now and 2013, when export revenues are due to start flowing, for things to change.

It is just that the past does not provide a great deal of confidence. At the time of independence, PNG ranked 77th out of 150 countries on the UN Human Development Index, which measures not only income but also factors such as education and life expectancy. Now, despite big projects such as Bougainville, Ok Tedi and Lihir, PNG comes 148th out of 182 countries, just above Haiti and Sudan.

Average life expectancy is 54 years and the infant mortality rate 64 per 1000 live births, much worse than the figures for indigenous people in Australia. Using the benchmark of living on less than $US1 a day, 37.5 per cent of people suffered extreme poverty in 2004, compared with 25 per cent in 1996.

Prime Minister Michael Somare bridles at such figures, saying people in the villages always have plenty to eat. But in a paper commissioned by the Lowy Institute, Laurence Chandy, a former senior economist with the PNG government, says those in extreme poverty typically are malnourished, vulnerable to infectious diseases, poor harvests, natural disasters and crime and lack access to jobs, land, education, health care, clean water and transport.

Chandy quotes the PNG government's data: 35 per cent of births are supervised by healthcare professionals, 45 per cent of those of school-leaving age completed primary education and 27 per cent of the road network is considered to be in good condition.

Keith Jackson, a former teacher in PNG who subsequently held a senior position in the ABC, and Paul Oates, a former patrol officer, have calculated that health spending per person in PNG averages $38 a year, compared with $5461 for indigenous people in the Northern Territory.

John Kleinig, a former teacher, says the school where he worked in Rabaul 40 years ago was better resourced than most schools in NSW at the time. A prime mover in a private charitable project in Oro Province that has set up a community-based program to provide resources and teacher training for schools, as well as health and agriculture programs, he says schools these days lack even the most basic resources, such as paper and pencils. "Teachers write lessons on the blackboard because, although textbooks exist, there generally is no money to purchase them," Kleinig says. Staffing schools is a problem, with teachers often suffering from diseases such as typhoid and malaria.

The Chandy paper points out that, despite recent high economic growth rates in PNG, in only three of the past six years have they exceeded the rapid rate of population growth. On one estimate, extreme poverty fell by 8.8 percentage points in the five years to 2008, though this was not enough to make up for the increase in the late 1990s and early part of this decade. Gross domestic product per capita remains below its 1996 level and will not catch up until 2014, assuming the government's growth forecasts are accurate.

Chandy diagnoses PNG's problem as the equivalent of bad circulation. Limited financial development and a rugged geography mean most transactions occur locally. Government revenue in the five years to 2008 rose from 23 per cent of GDP to almost 31 per cent but little has found its way to poor areas. Chandy says lack of public infrastructure isolates the poor and creates "a series of geographical poverty traps".

Some, including an urban elite, are benefiting. So are some landholders: Exxon recently handed out the equivalent of $500 per person to 1000 people under a benefit sharing agreement in an area where the company is building a large airstrip. This is more than the average annual household income of people in the area.

Corruption is one problem in PNG: Transparency International ranks it 151st out of 180 countries and says it is slipping further. The way the government does business does not help. Chandy says it justifies channelling funds, including cash transfers for individuals, through MPs and landowners as the best way of getting money to the poor. This method of distributing funds has grown from 15 per cent to 35 per cent of the development budget but there is no effective monitoring of the spending.

Chandy urges the PNG government to evaluate future foreign investment not just in terms of government revenue but its contribution to creating jobs. In the absence of a radically different approach by government, the LNG project and the high rate of economic growth accompanying it "will reinforce the existing structure of the economy in which the poor are largely excluded".

Canberra has a stake in the outcomes. In line with his penchant for targets, Kevin Rudd has tied future aid to PNG making progress towards achieving the UN's millennium development goals. These include halving the proportion of people living on less than $US1 a day by 2015, cutting the mortality rate of children under five by two-thirds, universal primary education and halting the spread of HIV-AIDS. They are big asks, particularly in the absence of effective leverage by Australia. Somare is looking for the country's coming riches to free PNG from dependence on the annual $390 million in Australian aid.

The time has come to assert more responsibility over PNG's national development, he said earlier this year, and part of that would involve an "aid exit strategy".

Hayward-Jones says that, while this makes sense in the long run, aid from Australia and elsewhere fills the gap in systems that have broken down. "In health, if it wasn't for Australia and other donors delivering medicines and vaccines and other services, a lot more people would be dying," she adds.

It would appear that the Federal Labor government has introduced Internet filtering without any big fanfare. The rationale is that this legislation will prevent people from accessing bomb making and child porn sites. While on the surface this is perfectly reasonable, it begs the age old question: 'Who will watch the watchers?' George Orwell in his classic book '1984' described how the government of the day monitored all incoming electronic traffic (read government propaganda) on the wall high tv screens in every house and through monitoring each person's mandatory responses from a camera on each wall, ensured everyone conformed to government dictums. Could this newly enacted legislation just be the thin edge of the wedge? Do we want nameless and blameless public servants deciding what we can watch on our computers merely based on someone's interpretation of the government's views of the day? What happens if the government's views start changing and prevent any alternative views from being 'aired'? E mail and internet news communication is now recognised as a fast and inexpensive way of informing people about issues. But what if the daily news was monitored and filtered to suit the wishes of the government of the day? Who would know? We are constantly bombarded with 'filtered' news even now. What might stop that process from getting worse? Look at what happens today in China?Have we as a species progressed from the time of Juvenal (63 -130) when he uttered those famous lines "Quis custodiet ipsos! Custodes? (Who is to guard the guards themselves?)http://www.whirlpool.net.au/http://www.lifehacker.com.au/tags/censorship/http://www.crikey.com.au/2009/12/23/stephen-conroy-dear-crikey-heres-why-youre-wrong/

A FORTNIGHT ago, Papua New Guinea's top corruption fighter, Chief Ombudsman Chronox Manek, arrived home in his Nissan Patrol from a function at about 10.30pm, and stopped in front of the gate to the Port Moresby house.

Two cars, which had followed him, suddenly turned off the road and hemmed his vehicle in. He rammed one of the other cars, but three men leaped from the second, and began shooting at him.

A bullet went through his shoulder, and he slumped forward. He had hit his car horn to alert his family, and the attackers drove off. Manek said they had left him for dead. It was a miracle he survived, he said. Despite being dizzy from loss of blood, he drove to hospital.

He returned to work this week. But neither the police nor the Ombudsman Commission are saying where the investigation is heading, beyond Police Commissioner Gari Baki's routine pronouncement: "We are determined to get to the bottom of this."

Such violence might have been an opportunistic robbery, or a planned act over personal issues unrelated to Manek's job as corruption-buster.

The alternative is that it was a "professional" assassination attempt. That should be easier to solve, since the suspects would be limited to those under investigation by Manek -- though they include some of the country's most powerful politicians.

It would also fit into a pattern of politically motivated violence that has long marred PNG's public life.

Assassinations are not new to PNG. Before independence, in 1971, Australian district commissioner Jack Emmanuel was stabbed to death near Rabaul as the push for independence intensified. Prisons commissioner Pious Kerepia was also stabbed to death, at his home in Port Moresby, in 1990. Bougainville leader Theodore Miriung, viewed by some as saintly, was shot in front of his wife and five children at home in 1996. In 1997, another Bougainville politician, Thomas Batakai, was shot in front of his wife in the garden of their home.

In 1989, there was an attempt to kill Australian judge Tos Barnett as he concluded an inquiry into corruption in the forest industry.

If the Manek shooting was politically driven, it encapsulates the cause of PNG's frustrating failure to improve living standards significantly over the past 30 years.

That cause is corruption. It is no coincidence that global corruption agency Transparency International rates it 154th out of 180 countries on its annual rating, with the 180th being the worst.

At independence in 1975, PNG was a reasonably well-run country with a great deal of optimism and an easy self-confidence. Civil society was strong, and crime rates modest. It caused a sensation when the Ombudsman announced a tribunal to consider the first minor leadership code breach for corruption, against a junior minister, Moses Sasakila. The "Gang of Four" top public servants, two of whom -- Mekere Morauta and Rabbie Namaliu -- went on to become prime ministers, were politically blocked when they went out on a limb to urge a tough new leadership code to contain such incipient corruption.

This, in hindsight, was the nation's crucial turning point. Corruption has turned into the virus which has undermined governments' capacity to deliver the services essential for the progress in living standards to which Papua New Guineans feel entitled, given the country's stream of successful resource projects, its massive aid injections, and its underlying agricultural base. What chance is there, then, that PNG can manage effectively the huge Exxon Mobil-led liquefied natural gas project, which will be by far the biggest the PacificIslands region has seen?

Construction, which starts next year, will cost almost double this year's $9.4 billion gross domestic product.

Prime Minister Sir Michael Somare -- who has championed a second LNG project -- acknowledged the extent of this challenge in a speech to his own staff Christmas party on Tuesday.

He admitted: "We have not trained our people for the projects, which will require between 8000 and 10,000 workers."

Exxon, he said, was asking for 500 drivers. "How do we get 500 drivers in a day?" The answer is that they will come from largely Asian guest workers, likely to live in a camp to be built near Port Moresby. The prospects for heightened violence in a city full of unskilled, unemployed, frustrated young men are immense.

How, Somare asked, can PNG plan to use the vast funds that will start to flow when the Exxon project begins producing in 2014? The answer is by setting up a sovereign wealth fund to capture revenues deemed as surplus to routine requirements, and investing them for the longer term.

But recently, when the 2010 budget was handed down, Treasury Secretary Simon Tosali described the massive drawdowns from trust accounts this year as "excessive government spending".

A high proportion of government spending is now paid out by cheque to individual MPs, who provide little or no accounting for the development projects they claim to assist.

Last year, the Auditor General said corrupt officials had stolen about $360m annually in recent years. Isaac Lupari, the government's top bureaucrat, was sacked for failing to establish an inquiry into $80m missing from the finance department's accounts.

Freedom House, a Washington-based organisation that researches democracy and freedom around the world, said in a recent report: "The Ombudsman Commission has named the police department PNG's most corrupt government agency. The correctional service is short of staff, and prison conditions are poor. Prison breaks are not uncommon.

"Serious crimes, including firearms smuggling, rape, murder, and drug trafficking, continue to increase. Weak governance and law enforcement are said to have made PNG a base for many Asian organised crime groups

"Tribal feuds over land, titles, religious beliefs, and perceived insults frequently lead to violence and deaths. Inadequate law enforcement and the increased availability of guns have exacerbated this problem. Violence against women is widespread. Attacks on ethnic Chinese and their businesses have become more frequent in recent years."

Malum: Regarding this item, I myself gave K2000 -( I was born in Sri lanka and my family goes back there to around 1660)-to a fund raised in Mt Hagen by a Sri Lankan and never received any news of what happened to the money. Most unsatisfactory- it happens too often.

John

COLOMBO – Nearly half a billion dollars in tsunami aid for Sri Lanka is unaccounted for and over 600 million dollars has been spent on projects unrelated to the disaster, an anti-corruption watchdog said Saturday.

Berlin-based Transparency International demanded an audit of the money received by the Sri Lankan government to help victims of the Asian tsunami which hit the island on December 26, 2004, killing 31,000 people.

The group's Sri Lankan chapter said the public have a right to know how the aid money was spent as the tropical nation marked the fifth anniversary of the tsunami.

The group alleged that out of 2.2 billion dollars received for relief, 603.4 million dollars was spent on projects unrelated to the disaster.

Another half a billion dollars was missing, the group said.

"There is no precise evidence to explain the missing sum of 471.9 million dollars," the Transparency International statement issued in Colombo added.

An "audit should be done by the government to explain the utilisation of the money received and the challenges faced," the group said.

An government official declined comment Saturday on the allegations but Colombo has consistently rejected such accusations in the past.

An initial government audit in 2005 found that less than 13 percent of the aid had been spent, but there has been no formal examination since, Transparency International said.

Wandamu Palau of NARI (right) and poultry training participants on practical in Japan

Wandamu Palau of NARI on a practical during poultry training in Japan

Wandamu Palau of NARI (standing second from right) with poultry training participantsin Japan

A Papua New Guinea livestock research officer returned recently from Japan armed with new and improved skills and information on poultry production.Keravat-based National Agriculture Research Institute officer, Wandamu Palau, attended a three-month poultry training at Fukushima, facilitated by the Japanese National Livestock Breeding Center (NLBC).

The training, sponsored by the Japanese International Corporation Agency, eventuated from Sept 1 to Nov 28.Mr Palau said some useful information he learnt from this training which would be useful to NARI poultry development initiatives, especially at its Islands regional centre at Keravat, including specific skills in:· Nutrition physiology in poultry;· Feed analysis methods;· General hygiene management and inspection methods in broiler and layer farm;· Manure fermentation and utilisation;· Science in chicken meat;· Breeding local specialty chickens;· Artificial insemination;· Vent sexing of day-old chicks; and· Sensory testing of different poultry meat.Mr Palau said all or most facets of Japan’s poultry production system were mechanised and there is limited human input in poultry operation.It was an experience to see and compare how PNG differed from the developed world like Japan, as far as production systems are concerned.A number of field activities were undertaken as part of the training.One practical was in disease prevention technology in which fecal samples of pintail migratory birds were harvested in Lake Towada in Northern Japan and HA and HI lab tests for detection of HPAI virus (Highly Pathogenic Avian Influenza Virus) were performed.The Pintail migratory birds migrate to North of Japan to rest in winter season and travel widely between Russian, California, and Alaska.Nine countries benefited from this training which included Bangladesh and Ghana in West Africa (two participants each) while Malawi, Uganda, Egypt, Myanmar, PNG, Sri Lanka and Ukraine (former Russian Republic) had one participant each.

Troglodyte village in IRAN 700 years old - In the north west of Iran at the foot of Mount Sahand in Kandovan, The villagers live in cave homes carved out from the volcanic rock. The age of some houses is more than 700 years.

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